Bermuda Shipping Registrations
Bermuda trusts are extremely flexible and can be used for a broad range of purposes, including accumulating income, holding property (whether real, personal or an active business), estate planning, employee benefit plans, pension funds, deferred income plans and, of course, charitable purposes.
Many ‘inter vivos’ settlements and trusts established in Bermuda (whether discretionary, fixed, protective or for a special purpose) are generally created by means of two instruments, the trust deed that declares the terms of the trust and the conveyance or transfer that transfers the legal title of property to the trustees.
The common law rule against perpetuities states that, upon the first day of the inception of the trust, there must be absolute certainty that the trust fund shall vest within a life in being at the time the trust is created plus 21 years. Instead of using lives in being as the perpetuity period, the period may be limited according to the Perpetuities Act which provides that any period not exceeding 100 years from the date of the instrument creating the trust may be selected. The Perpetuities Act has simplified the application of the rule against perpetuities in order to ensure the validity of certain trusts.
There is no stamp duty and no other form of taxation levied on Bermuda trusts or on capital or income payments from the trusts established for the benefit of non-residents of Bermuda, except in relation to “Bermuda Property,” upon which stamp duty is payable upon transfer or lease.
A Bermuda trust may have one or more trustees and Richmond has extensive experience in this area. Bermuda trusts that meet the grantor trust rules are utilized by clients to make investments offshore in non-dividend paying companies, thereby giving the grantor and the beneficiaries in certain cases significant fiscal and other benefits.
In addition, a Bermuda trust offers the non-tax advantage of flexibility. For example, a trustee can be given broad or narrow investment and reinvestment powers, specific instructions regarding the distribution of income or capital, the power to move the trust to another jurisdiction and the ability to combine the trust with one or more holding companies.
Special Purpose Trusts
Special Purpose Trusts arise when the trustee is appointed to carry out a special or particular purpose designated by the Settlor, which need not be a charitable purpose. Such purposes must be reasonable, specific and not contrary to public policy or Bermuda law. Special Purpose Trusts are utilized in aircraft financing and other lease arrangements.
A Charitable Trust aims, in general, to achieve a purpose that will benefit society or some particular section of it. Such trusts may be formed in Bermuda for a broad range of charitable purposes, including the advancement of education, religion or other social, sporting or recreational purposes. For detailed information on Bermuda Trusts, please see our Memorandum on Settlements and Trusts. Contact our office directly for legal assistance with settlements and trusts.